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Democratic Homestead Exemption at Heart of Property Tax Cut Agreement

and four other things Abbott, Patrick, & Phelan don’t want you to know about the tax cut proposal

The Texas Legislature will finally use a portion of the over $30 billion budget surplus to pass along a tax cut to Texans. Incredibly, Republican leaders nearly blew it. Governor Greg Abbott, Lt. Governor Dan Patrick, and House Speaker Dade Phelan tied themselves in knots trying to figure out how to simply give Texans some of their money back.

Press coverage of the back-and-forth has been intense, with the final consensus being that the Senate and Dan Patrick got nearly all of what they proposed, Abbott got a lot of what he wanted, while Dade Phelan and House Republicans got almost nothing.

But there are some other important facts about the plan not sufficiently discussed that likely won’t be talked about by Patrick, Abbott, or Phelan: 

Increasing the Homestead Exemption is a Democratic Idea

The most fair, efficient, and important component in the property tax cut agreement is the extension of the homestead exemption up to $100,000 of appraised home value for local school taxes. While Dan Patrick staged a series of animated press conferences touting the advantages of increasing the homestead exemption, he left out an important fact – it’s a Democratic idea pushed by Democratic members for more than 20 years. In fact, the last time Democrats controlled the State House and Senate, the homestead exemption was tripled. Patrick’s promotion of a homestead exemption was flatly rejected by Speaker Phelan until Democrats rolled out a plan with it as a central feature. 72 hours later, Phelan caved and the agreement was rolled out with the DEMOCRATIC priority – a $100,000 homestead exemption – as the central feature. The most suitable statement from Democrats in the Legislature should be – You’re Welcome.

Neutered Appraisal Cap Provision a Fig Leaf for Phelan

The plan first pushed through the House by Speaker Dade Phelan and his hand-picked Ways and Means Committee Chair Morgan Meyer (HD108 – Dallas) was a dud. The Phelan/Meyer plan featured a broad California-style appraisal cap provision that largely stiffed middle-class homeowners. Patrick and other critics rejected the broad appraisal cap approach out of hand with the Texas Tribune reporting:

“… tightening the appraisal cap would lead to all kinds of repercussions that have already played out in California, New York and other parts of the country, tax experts and critics of the proposal from across the political spectrum warn. They say placing a hard limit on how much appraisals can grow would create vast inequities between taxpayers, accelerate housing costs and disproportionately benefit wealthy homeowners.”

What remains of appraisal caps is a stripped-down and gutted version that will expire in three years. It’s a fig leaf for Phelan, and not much else.

House Ways and Means Chair Morgan Meyer Withered Under Pressure

It’s hard to screw up being appointed Ways and Means Committee Chair with the assignment to give billions in surplus funds back to taxpayers – but Morgan Meyer did it. When marking up and moving his and Phelan’s California-style appraisal cap approach, Meyer failed to master the details of his own plan and was unable or unwilling to defend it to the media. Even simple inquiries stated directly were more than Morgan could handle. Essentially, once the game started and Morgan Meyer was handed the ball, he fumbled. When given a golden opportunity under the bright lights, Morgan melted. After the first failed effort by the House, Meyer was relegated to the background, performing the ceremonial functions of Chair but warming the bench otherwise.

Who Took Out the Teacher Pay Bump?

The most duplicitous move over the regular Legislative Session and the two Special Sessions is the bait-and-switch betrayal of Texas public school teachers. Texas teachers are among the most underpaid in the nation. There is broad public support for increasing their pay. Texas had a record budget surplus. Democrats strongly support a raise, so building bipartisan support should be easy for Republican leaders. But, instead of being sincere and legitimate, Dan Patrick paired a teacher pay raise with the homestead exemption in a relatively attractive Senate plan. But he didn’t mean it. Apparently the first thing pulled from the table was the teacher pay raise proposal. And, when pressed to identify who wanted the pay raise out, Patrick refused to say. Offering up and then pulling back a teacher pay raise is not just a sign of negligence or bad policy, it’s a punitive act that exposes the hostility Texas Republican leaders really have to Texas school kids and their teachers.

Renters Still Screwed

It’s also clear that State Republican leaders had no intention of extending the benefits of a property tax cut to the one-third or so of Texans who rent rather than own their homes. The Democratic alternative included a common-sense provision to provide renters a rebate to help them get back their share of the surplus. Republican leaders stiffed them. Worse still, Morgan Meyer used the dishonest claim that since landlords will get a property tax cut, they would naturally pass it on to tenants. Morgan is not bright, but he knows the trite trickle-down argument is a lie. Free market forces and not tax rates drive rental costs, and tenants are likely to see little or none of a property tax limited to owners.


So, while legislators pat each other on the back for bumbling through the Regular and two Special Sessions to do what should be the easiest work of a politician – giving surplus funds back to taxpayers – the media and the rest of us should not join in the congratulations. Texas Republican leaders exposed their dysfunction. They made clear that our school kids and their teachers are low priority. Middle-class homeowners would have been badly shortchanged had Patrick not picked up the long-held Democratic position that homestead exemptions are the best and fairest way to provide homeowners real property tax relief. 

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